Magazine

Smart investment in the real estate market

Real-estate market

Introducing mid-term rentals

Introducing mid-term rentals

08 October 2020

Share:

Although the summer has been very successful in terms of bookings and revenues in places like Cádiz, we are facing the end of the high season and unfortunately, the consequences of the COVID impact on tourism and short-term rentals.

From now on, we are going to have fewer bookings, and therefore we must start thinking out of the box, in order to maximize our investor´s return.

This is why we have decided to start marketing our apartments also as Mid-Term rentals, for the next few months. (Mid-terms rentals target guests who are looking to book stays of 30 days or longer, but less than 1 year).

Guests who book mid-term are usually not travelers, and therefore we must adapt all our strategies in order to offer them the property they need.

During these last months, we have been working very hard on this, and we are now very happy to announce that we have started renting our properties in Seville following this mid-term strategy.

This new strategy means that we will have less income but also less costs, and we will maximize our benefits in comparison with our actual model.

Less income but less expenses.

With this new model we will be getting less income but also less expenses, as running a vacation rental property it is expensive as home supplies, cleaning expenses and management fees are usually quite high.

In mid term rentals, owners don't have to pay for all these expenses, so in a COVID scenario with fewer bookings, it is more profitable over short term bookings.

All our properties will be rented (again) as vacation rental properties as soon as short-term rentals become, more profitable than mid-term rentals

Impact on overall yield.

Short term rental used to be way more profitable than long-term and mid-term rentals, that's why we decided to focus on them in order to offer better yields to our investors. But we have to keep in mind that there´is no much difference during the low season, even during the precovid period.

For the time being, we want to market our properties as mid-term rentals only during the low season, and we will publish them as vacation rental properties for the high season (June-September). Therefore the final impact on our properties overall yield will be low, around 1%-1.5%.

As we can see in the below graph, taking 2019 Carmen Coronada data as a reference, there will be only an aggregated 850 eur difference in profits between the short term and mid-term rentals. Assuming we rent the properties as vacation rental properties during July, July and September, and as the mid-term rental during the rest of the year (from October to May).

You might be interested in